AMBORLIAO advantageous opening there it may be willing or, indeed, may welcome, the opportunity to grant a concession for the entry of some other product into its own market. This theory rests on a foundation of intense nationalism and is consistent with the theory of the protective tariff. It characteristically seeks to get the maximum advantage for such economic activity as, from the point of view of supposed national welfare, will be for the best upbuilding of the national economic life. From the point of view of international comity there is something to be said in favor of the method of bargaining that operates through mutual concessions. The failure to offer a concession is certainly less irritating than the imposition of a penalty. On the other hand, it must be remembered that a special concession to one country is in effect a penalty upon the commerce of all others. The reciprocity provisions of the Dingley Act and of the Fordney Bill were in accord with the high protectionist principles which prevailed in those measures. In a low tariff or free-trade régime there would be less to bargain with and bargaining provisions of the sort under discussion would be less likely to be found. A free-trade country may, however, in consideration of the assured continuance of such régime, induce another country to accord to it special concessions. (2) The theory of equality of commercial opportunity may appropriately be translated into practice through the assistance of additional duties, which may by administrative act be levied against countries that discriminate against a country's commerce, especially its export trade. From the point of view of commercial advantage it forms an appropriate foundation for the policy of a country that feels able to hold its own or perhaps excel others in all markets where its goods are not discriminated against-that is to say, where It says they are accorded most-favored-nation treatment. in effect that, under penalty, all markets must extend equal advantages to all competing nations. The most elemental consistency requires the nation proclaiming it to refrain ! from discriminatory practices in regard to its own market. The realization of this theory is consonant with the practice of either protection or free trade-though, of course, the actual levy of defensive duties would form an exception to the free import of the commodities to which such duties applied. On the other hand, extremely high tariff walls, whether or not raised in the name of protection, seem out of harmony with this theory. If a country's import duties pass a certain height the fact that they fall equally upon the products of all nations ceases to be of interest: they are too high to be crossed and the market is effectively closed; the theoretical equality is practically the equality of negation. The practical object of the theory of equality of opportunity, it must not be forgotten, is the maintenance of markets. Probably many of the schedules of the Payne-Aldrich Act and the Act of 1922 may be accounted thus incongruous with the maximum-minimum provisions of the former and Section 317 of the latter. These two examples indicate that the penalty method of operation is to be expected where the object of commercial policy is to obtain equality of treatment. A proposition involving mutual concessions would, of course, be inconsistent with the idea of equality unless the concessions are to be generalized. Some of the other parties to agreements concluded under the Act of 1897 accorded to the United States nothing that was not in general accorded to other foreign countries. (3) Finally there is the theory that a country may use the provisions of its own tariff law in efforts to batter down 'The act of 1909, though in form conceding minimum rates, may be regarded as actually threatening the maximum. the tariff walls of other countries. If a nation imposes duties that are deemed by another to be unreasonable, that other country may undertake, by offering concessions or by imposing penalties, to persuade or force the first country to reduce its rates of duty. If it offers concessions it in effect offers reciprocity, as described above in the first example. It may, however, either from necessity or choice, undertake to bring the "unreasonable" country to terms by penalizing the latter's goods entering its market. Since the meaning of unreasonable is likely to vary according to the duties which its own schedules impose upon the articles in question, the exercise of penalty duties in this case proclaims its exclusive right to determine for other countries besides itself the legitimate height of import duties. Carrying the policy to its extreme, a country might assert that no other government should impose duties as high as its own. Obviously such a stand would be inconsistent, if not positively belligerent, if taken by a nation which itself imposed protectionist dutiesor at least, duties higher than those which it attempted to eliminate in the schedules of other countries.1 The policy is logically one of aggressive free trade: free trade of the militant sort that seeks to force itself upon all nations. If a nation honestly believes in free trade and wants to make a crusade for its universal adoption, it has in the theory under discussion a weapon at hand. The Acts of 1890 and 1897 were high protection measures and the appearance in them of sections of the character under consideration seems inharmonious, to say the least. The sections were, however, consistent within themselves 1 Penalty import duties are sometimes levied in retaliation against practices of other countries bearing little or no relation to customs duties. Thus several provisions of the Tariff Act of 1922 undertake to penalize in this way certain conservation and export restrictions of other countries which affect articles imported into the United States.-See infra, subdivision 29. inasmuch as the articles liable to the penalty duties were all included in the free lists. The present thesis concerns itself solely with the second. or defensive-duty theory, which contemplates most-favorednation treatment. It finds adequate expression in Section 317 of the Tariff Act of 1922 and is the basis of probably the best, if not the only, policy consistent with international comity as most highly developed in present-day public opinion. Should the future public opinion of the world turn definitely against protectionism and its cherishing mother, nationalism, the international ethics of that day may countenance an effort by one state to penalize another state into the abandonment of practices that, from the new point of view, would be anti-social. Under the contemplated circumstances, import duties for any purpose other than revenue would probably fall within the definition of anti-social. For the present, however, we believe very strongly that the tariff, if not, in General Hancock's phrase, a "local" issue, is a purely national affair,1 about which, so long as it does not discriminate, no other nation should presume to do otherwise than make mild representations. While this belief persists international comity and international ethics alike must forbid us to demand as of right from other countries duties at rates of our own choosing." 'That public opinion may be gradually changing in this respect is suggested in ch. xii. 'Cf. infra, subdivision 28. CHAPTER III SECTION 317 AS THE BASIS OF COMMERCIAL POLICY AND THE CHARACTER OF THE POLICY NATURALLY TO BE DERIVED FROM IT 20. ECONOMic purpose of section 317 In addressing to persons and firms engaged in exporting merchandise from the United States a circular letter and questionnaire 1 requesting their assistance in gathering data relating to discriminations against American commerce, the United States Tariff Commission called attention to the fact that "Section 317 was enacted for the special benefit of American export trade" and stated that it counted “upon the wholehearted cooperation of American exporters in securing the authentic first-hand information required" for the effective administration of the section. The Tariff Commission stated the situation correctly, but in the larger sense Section 317 was enacted because, to a greater extent than ever before, the prosperity of the United States is dependent upon the sale of its products abroad and because, consequently, the general welfare requires, as never before, equality of opportunity in the world's markets. When it is considered that a falling-off of ten per centum in the country's business activity is sufficient to mark the difference between "prosperity" and "hard times”, the importance of maintaining unimpaired the flow of American products to all markets may be readily appreciated. 106 1Supra, subdivision 2. [316 |